Evaluating Natural Resource Investments under Different Model Dynamics: Managerial Insights

We focus on factors that drive the dynamics of commodity prices. We highlight the capital budgeting implications of three highly‐cited, nested, multi‐factor models for commodity prices that have been successful in empirical investigations. Competing assumptions regarding commodity prices and their convenience yields can account for differences close to 40% on average, and in excess of 60% in cases, in the valuation of typical natural resource investments. These value differences are found to increase with the maturity and the intrinsic value of the investment, and also with the level and the volatility of the resource's convenience yield. Resources such as oil or copper, that are used for production purposes, usually exhibit high and volatile convenience yields; thus our findings should be more relevant for decision‐makers in such sectors.     

REFORMING HEALTH AND SOCIAL SERVICES IN POLAND - An overview

The transformations taking place in Poland aim, among others, at adapting the system to new conditions of a market economy. The irrationality of funding social services by the budget made it necessary to restrict the role played by the State in their funding. It means the need for changes concerning not only institutional reforms but also new sources of income. The goal of this paper is to present the main directions of reforms occurring in the Polish economy on the example of health care. The paper concentrates on the problems of implementation, the reform in health care, its reasons and consequences. The trends indicate that the process of reforms is going in the direction of developing new methods and forms of funding and reducing the share of budgetary funds in the funding of social services. The state responsible for the reforms makes an attempt to create appropriate legal and organizational conditions for the question of institutions providing social services.     

For some mothers more than others

We estimate the effect of family size on female labour supply using data from Poland and instrumenting for family size with twinning at first and second birth. To the best of our knowledge, this is the first study to causally address this relationship in a post‐communist country. We identify the average causal effect of an additional child on mother's employment to be ?7.0 pp, but we do not find significant effects of additional children on female employment among families with two or more children. Furthermore, we identify a positive bias of OLS in the estimates among highly educated mothers and those from younger cohorts.     

Political system and economic efficiency: The east European context

Sections 1 and 2 reexamine the proposition about democratization of socialism as a factor of economic efficiency—in the light of the challenge contained in the article by Stanislaw Gomutka, “Economic Factors in the Democratization of Socialism and the Socialization of Capitalism” (J. Comp. Econ., Dec. 1977, 1, 4:389–406). The author takes issue with Gomulka's conclusions, which view democracy as of little relevance for economic efficiency under socialism. Dissident views on the link between democracy and efficiency are discussed. Section 3 goes beyond this controversy in an attempt to analyze the prospects and efficiency aspects of a limited change within the existing Soviet-type political system (“Kadarism”).     

Market discipline during crisis: Evidence from bank depositors in transition countries

The Central European banking industry is dominated by foreign-owned banks. During the recent crisis, for the first time since the transition, foreign parent companies were frequently in a worse financial condition than their subsidiaries. This situation created a unique opportunity to study new aspects of market discipline exercised by non-financial depositors. Using a comprehensive data set, we find that the recent crisis did not change the sensitivity of deposit growth rates to accounting risk measures. We establish that depositors’ actions were more strongly influenced by negative press rumors concerning parent companies than by fundamentals. The impact of rumors was especially perceptible when rumors turned out ex post to be founded. Additionally, we document that public aid announcements were primarily interpreted by depositors as confirmation of a parent company’s financial distress. Our results indicate that depositors react rationally to sources of information other than financial statements; this discovery has policy implications, as depositor discipline is usually the only viable and universal source of market discipline for banks in emerging economies.     

Demand-supply coevolution with multiple increasing returns: Policy analysis for unlocking and system transitions

Currently, there is much concern about how to make a transition away from environmentally unsustainable activities to sustainable ones, notably in agriculture, energy and transport sectors. The success of such a transition depends on whether one is capable of escaping the lock-in of the dominant, unsustainable technology, which is usually due to multiple lock-in factors. Here, we present a formal model to study the likelihood of market lock-in in the presence of multiple increasing returns. The proposed framework describes coevolving populations of boundedly rational consumers and innovating firms. On the demand side, we focus attention on the interdependence of consumer preferences. We examine the impact of alternative demand side specifications on the direction of innovative activities of firms. On the supply side, a technological trajectory arises from the interplay of incremental innovation, search for a new product design and marketing activities. Our framework provides a general and complete account of increasing returns on supply and demand sides, as well as their synergetic interactions. The model is used to study a number of policy instruments aimed at escaping lock-in.     

Unconventional incentive schemes in tourism enterprises,does it make sense?

Quality & Quantity - The purpose of this article is to describe the model of the most important employee financial participation (EFP) programs and give some proposals aiming at wider promotion...     

Entrepreneur and the state-managed economy under socialism

The paper deals with institutional change in Poland. The accompanying pherlomenon is an escalating wave of entrepreneurial ventures. They take on different legal forms. The most popular, limited liability companies, emerge in the private, the cooperative, and the state sectors, and often across these sectors. These developments give rise to new interest groups which generally support a market reform. The conflict between the market oriented sector and the administered sector becomes one of the main factors influencing the economic policies of the state. In the paper, the development of the private sector is analyzed with the use of measures relating to the proportion of revenues from the private sector in the total state budget revenues.     

Shocked by therapy? Unemployment in the first years of the socio-economic transition in Poland and its long-term consequences

We examine the long-term implications of unemployment for material conditions and well-being using the Polish sample from the Survey of Health, Ageing and Retirement in Europe (SHARE). Retrospective data from the SHARELIFE survey are used to reconstruct labour market experiences across the threshold of the socio-economic transformation from a centrally planned to a free market economy in Poland. These individual experiences are matched with outcomes observed in the survey about 20 years later to examine their correlation with unemployment at the time of the transition. We find that becoming unemployed in the early 1990s correlates significantly with income, assets and a number of measures of well-being recorded in 2007 and 2012. Using plant closures to reflect exogenous changes to labour market status at the time of the transition, we are able to confirm the causal effect of unemployment on income and house ownership 20 years later, but find no evidence for a long-term causal relationship between unemployment and such measures of well-being as life satisfaction, depression and subjective assessment of material conditions.     

Using Geographically Weighted Choice Models to Account for the Spatial Heterogeneity of Preferences

In this paper, we investigate the use of geographically weighted choice models for modelling spatially clustered preferences. We argue that this is a useful way of generating highly‐detailed spatial maps of willingness to pay for environmental conservation, given the costs of collecting data. The data used in this study come from a discrete choice experiment survey of public preferences for the implementation of a new national forest management and protection programme in Poland. We combine these with high‐resolution spatial data related to local forest characteristics. Using locally estimated discrete choice models we obtain location‐specific estimates of willingness to pay (WTP). Variation in these estimates is explained by characteristics of the forests close to where respondents live. These results are compared with those obtained from a more typical, two stage procedure which uses Bayesian posterior means of the mixed logit model random parameters to calculate location‐specific estimates of WTP. We find that there are indeed strong spatial patterns to the benefits of changes to the management to national forests. People living in areas with more species‐rich forests and those living nearer bigger areas of mixed forests have significantly different WTP values than those living in other locations. This kind of information potentially enables a better distributional analysis of the gains and losses from changes to natural resource management, and better targeting of investments in forest quality.